Formal and informal entrepreneurship: a cross-country policy perspective

Elaine Laing, André van Stel and David J. Storey
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Elaine Laing: Trinity College Dublin, The University of Dublin, College Green
David J. Storey: University of Sussex

Small Business Economics, 2022, vol. 59, issue 3, No 3, 807-826

Abstract: Abstract This paper distinguishes between formal and informal entrepreneurship. It theorises that each are influenced by very different combinations of macro-economic factors and strongly moderated by country income levels. Empirically, we show the ease of starting a business and high-quality governance, exert a powerful influence on formal, but not informal entrepreneurship. The latter is influenced by self-employment rates in low-income countries and by female labour force participation in high-income countries. Policy-makers seeking to improve economic welfare through enhancing entrepreneurship therefore have to choose the ‘type’ of entrepreneurship on which to focus and then select appropriate policies. By providing a novel grouping of these policies, we are able to assist them in making these choices.

Keywords: Formal entrepreneurship; Informal entrepreneurship; Cross-country comparison; Policy; J48; L26; O11; O17 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11187-021-00548-8

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